First Berlin Equity Research has published a research update on Deutsche Effecten- und Wechsel- Beteiligungsgesellschaft AG (ISIN: DE0008041005). Analyst Christian Orquera reiterated his BUY rating and decreased the price target from EUR 1.90 to EUR 1.80.

Abstract
DEWB has published its financial statement for 2022 reporting other operating income of €0 (FBe: €0, FY/21: €9.4m due to Muetec’s exit to the Chinese group TZTEK) and EBIT of €-0.9m (FBe: €-1.0m; FY/21: €8.1m), roughly as anticipated. The net result was €-4.8m (FBe: €-1.6m; FY/21: €7.5m). As previously announced, the company conducted a non-cash impairment of €3.3m for the two neobroker holdings, the listed company Naga Group and the private firm Nextmarkets. Both companies were negatively affected by the current challenging capital market environment. Following disappointing amended results for 2021 and a challenging 2022, Naga successfully implemented restructuring and cost-cutting measures switching focus from growth to profitability. In Q1 2023, Naga showed an encouraging performance achieving profitability and a rising number of clients in its core neobrokerage business. Nextmarkets suffered a strong setback following weaker than planned business development in Q1 2023; the lead investors decided not the support a necessary financing round and sell the company’s assets with the intention to close the company thereafter. However, the lead investors have, in the meantime, changed their minds and launched a continuation scenario initiative. If successfully implemented, this would open up turnaround opportunities for the investment. The remaining Fintech holdings consisting of Laiqon (listed), Aifinyo (listed), Cashlink (private), and Stableton (private), are performing positively in a challenging environment for Fintech companies, and following capital measures in 2021-23, Aifinyo, Cashlink and Stableton are also well financed. Laiqon is in the process of raising funds; the acquisitions and strategic cooperations (e.g. Volksbank, Union Investment Group) closed in 2022 and 2023 represent significant milestones for future growth. Overall, DEWB confirmed its outlook for 2023, and the company plans to conduct an exit which would lead to a positive annual result. Following FY/22 reporting, we have updated our financial model. We reiterate our Buy recommendation with a price target of €1.80 (previously: €1.90).